What To Know About Divorce in Community Property States

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What To Know About Divorce in Community Property States

Almost half of American marriages end in divorce, and divorce is a common end to marriage around the world. While this change in relationship status can feel disappointing and stressful, it’s also an opportunity for you to explore new horizons. Before you can move onto those new horizons, though, you and the person you’re divorcing will have to decide how to split assets and debts. In community property states, state law can decide that division for you. Keep reading to learn what to know about divorce in these areas.

What Does Community Property Mean?

Community property is a legal term used in various US states. It describes the fact that those states see any assets, as well as debts, as community property if you or your spouse acquired them during the marriage. That means the assets and debts belong to both of you. The state does not consider property acquired before the marriage or after the separation to be community property.

If the assets and debts belong to both of you, what happens when you divorce? That decision often comes down to the specific state. However, most of these states split community property 50/50.

Which States Are Community Property States?

There are nine community property states:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

In Alaska, South Dakota, and Tennessee, spouses can agree to a community property law, but it is not required. If you live in any of these states, there’s a strong chance that you and your spouse will split assets and debts 50/50 upon your divorce.

However, a divorce lawyer and discrepancies within state laws can change that split. For example, Texas lawyers regularly debunk common myths about the divorce process in the courtroom, including the 50/50 split. Texas takes other factors into consideration and does not force a 50/50 split if it is not equitable.

Can a Prenuptial Agreement Change Community Property?

While community property is the standard law of the land in the nine states we listed above, you can override it with a prenuptial agreement. Your prenuptial agreement must be valid and cannot violate any state or federal laws. If the agreement meets these standards, the court will probably hold you to the terms of the agreement instead of community property laws.

What Happens in Non-Community Property States?

In the states we didn’t list, people going through a divorce experience common law instead of community property. Common law places assets and debts with whoever is the exclusive owner, even if they acquired the asset or debt during the marriage. Upon divorce, the court splits these assets and debts equitably. The court assesses the education levels, employability, financial needs, health, and other factors of each spouse to determine a fair split.

Divorce is often sad, but it’s also an opportunity to break out of an old situation to try new experiences. Now that you know about the basics of divorce in community property states, you can start focusing on those new experiences instead of what you’re leaving behind.

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